Sao Paulo Less Expensive Than New York

Cost of living, Carlos Slim’s wealth, UPS Brazil expansion and human development.

BY LATINVEX STAFF

Sao Paulo is no longer more expensive than New York, according to the latest Cost of Living survey from Mercer. The Brazilian business hub fell from 19^th place to 49^th place, while New York went from 24^th to 16^th place.

The Mercer survey covers 211 cities across five continents and measures the comparative cost of over 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

Venezuela’s capital was left out of the rankings as a result of the complex currency situation that includes multiple exchange rates. “Its ranking would have varied greatly depending on the official exchange rate selected,” Mercer says.

Also Rio de Janeiro dropped on the cost of loving survey (from 29^th to 65^th place). “Both cities dropped … as a result of the Brazilian real weakening against the US dollar despite increases in rental prices,” Mercer says.

Argentine capital Buenos Aires also dropped significantly – from 59^th place to 86^th. “Buenos Aires also dropped significantly this year … following the devaluation of its currency, and despite a strong price increase for goods and services,” Mercer says.

Apart from Sao Paulo’s drop compared with New York, other noticeable developments include Haitian capital Port-au-Prince’s jump on the ranking to third place in Latin America behind Sao Paulo and Rio de Janeiro.

The key driver is that the Haitian gourde gained more than 5 percent against the US dollar between March last year and March this year, says Mercer spokeswoman Miriam Siscovick.

The Mercer survey shows that five Latin American cities are more expensive than Miami and one – Bogota – the same. The five are Sao Paulo, Rio, Port-au-Prince, Buenos Aires and Santiago.

Mexico City ranks 12^th in Latin America, while Managua ranks as the least expensive city.

Latin America’s Most Expensive

 Source: Mercer

FORBES, BLOOMBERG DISAGREE ON SLIM AS RICHEST

Forbes recently named Mexican mogul Carlos Slim as the world's wealthiest man again (after ranking behind Microsoft founder Bill Gates since May 2013).

“Carlos Slim Helú is once again the world’s richest person, thanks in large part to a sharp increase in telecom giant América Móvil’s share price both in U.S. and Mexican markets," Forbes said, estimating Slim’s fortune at $79.6 billion (compared with Gates’s estimated fortune of $79.1 billion)..

Not so fast, says Bloomberg. Its Billionaires Index placed Slim’s fortune at $76.2 billion compared with $83.3 billion for Gates the same week Forbes announced its estimates. As of July 30, the index estimated Slim’s fortune at $78.4 billion versus $83.9 billion for Gates. 

UPS EXPANDS IN BRAZIL

US-based logistics giant UPS is expanding its operations in Brazil, its top market in Latin America.

“The continued enhancement to our product portfolio and expansion within the country is part of our long-term strategy to increase our territorial coverage and strengthen our services, providing our customers optimum logistics solutions to better meet their needs,” says Nadir Moreno, president of UPS Brazil.

A key part of the reason for the expansion is Brazil’s strong e-commerce growth. “UPS puts a lot of faith in the growth of local e-commerce,” Moreno says.

Brazil is the largest e-commerce market in Latin America and online sales grew 26 percent in 2011 to more than $11 billion. Predicted online sales of $12.2 billion in 2012 is expected to more than double by 2017, according to the Cross-border Ecommerce Report by The Paypers.

In the state of Sao Paulo, UPS is opening nine new operating facilities, which will increase the company's country-wide network by 78 percent to reach more than 200 cities. The nine operating locations will be strategically situated in the cities of Sao Carlos, Ribeirao Preto, Franca, Bauru, Sao Jose dos Campos, Sao Jose do Rio Preto, Botucatu, Aracatuba and Presidente Prudente, and are set to be completed by May 2015.

UPS is also adding another 50 vehicles to its fleet to reach a  total of 115 vehicles and adding routes to Santos, Sao Jose dos Campos, Sorocaba, Marilia and Campinas. This will enable UPS to extend its services by two additional hours to place and pick up orders.

UPS's expansion in the state of Sao Paulo will increase the size of its operations to almost 216,000 sq. feet, which will include a total of 21 operating facilities, serving more than 110 municipalities and reaching more than 200 cities nationwide. Currently UPS has 12 facilities in Brazil.

The in-country growth will employ more than 3,000 employees, creating an estimated 100 new jobs and add more than 800 third-party staff positions.

Beyond expanding the capacity of its operations, and as a continuous effort to offer logistics solutions to all industries in Brazil, UPS announced in April 2014 the opening of an 80,000 sq. foot facility dedicated to the healthcare sector. UPS also included an additional 86,500 sq. feet of dedicated space for high-tech capabilities, bringing the total to 166,500 sq. feet of dedicated multi-client operations in Cajamar, Sao Paulo.

HUMAN DEVELOPMENT CHAMPIONS AND LOSERS

Chile continues to have Latin America’s highest human development, while Haiti has the region’s lowest levels, according to the 2014 Human Development Report from the UN Development Program (UNDP).

Compared to all other developing regions, Latin America and the Caribbean has the highest Human Development Index (HDI)—a composite measure of longevity, standard of living and education. However, progress has slowed in this and other regions over the past five years compared to 2000-2008, and persistent vulnerabilities threaten to reverse the achieved gains, the report says

As a whole, Latin America and the Caribbean surpasses all developing regions in every HDI component except for mean years of schooling. The region’s average life expectancy at birth, 74.9 years (compared to 74.2 in 2010) is over four years above the world average, and its average gross national income per capita is slightly above the world average, at US$12,926 PPP in 2010, compared to $13,767 PPP in 2013. The region’s 7.9 mean years of schooling remained unaltered from 2010-2013.

The region also ranks highest among developing regions on the new Gender Development Index, with a female HDI value at 96.3 percent of that for males. Argentina, Barbados, and Uruguay are among the 16 countries in the world in which female HDI values are equal or higher than those of males.

Average annual growth rates in the region’s HDI dropped by about half over the past five years compared to growth between 1990 and 2000. This was a larger drop than in all other regions except the Arab States.

The report attributes part of the HDI slowdown to the global financial and economic crisis. To boost resilience and reduce the region’s exposure to future financial shocks and volatility, UNDP calls for the creation of a Latin American Monetary Fund to complement global funds. The Report also recommends universal provision of basic social services, stronger social protection policies and full employment to advance and secure development progress while reducing vulnerabilities—particularly for the most disadvantaged groups and for those who are at sensitive periods of their life-cycle, like children, the elderly and youth entering the labor market.

The report reveals that more than 45 million vulnerable people in Latin America and the Caribbean are at risk of falling into multidimensional poverty—with multiple deprivations in their education, health and living standards—if financial, natural or other setbacks occur.

“Boosting resilience now is crucial to secure the region’s achieved gains,” Jessica Faieta, UN Assistant Secretary-General and UNDP Director for Latin America and the Caribbean, said in a statement.

While income inequality has risen in several regions, it declined in Latin America and the Caribbean, in part because of the expansion of education and public transfers to the poor, the report says. The region has also been closing the gap in health inequality.

“Inequality matters not only for those at the poorest end of the distribution, but for society as a whole—as it threatens social cohesion and hampers social mobility, fuelling social tensions that can lead to civil unrest and political instability,” the report says.

The report also stresses personal insecurity as a key challenge in the region, which records the highest homicide rates, higher than 70 per 100,000 inhabitants. And many, especially women, feel that their personal security is at risk. 

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